The Cost to "Transform" the Economy

KEY TAKEAWAYS

• CBO says Democrats’ reckless tax and spend spree will increase the federal deficit by $367 billion, not the $0 Democrats had promised.
• CBO also estimates that Democrats’ bill spends $1.7 trillion, but that estimate exists only on paper because of all the gimmicks in their scheme. More realistic estimates go as high as $4.9 trillion.
• When Democrats passed their partisan $1.9 trillion spending law in March, they said it would be “transformational.” Since then, inflation has hit a 30-year high, driving consumer confidence to a 10-year low. What will be the consequences of another $4.9 trillion? 

Since President Biden took office, Democrats have focused on a radical and partisan agenda. Along the way, they have simultaneously argued that their schemes will amount to “historic,” “transformative” changes to the U.S. economy, and that they will cost “zero.” The Congressional Budget Office cost estimate of Democrats’ reckless tax and spend spree, which shows that the bill will increase the deficit by $367 billion over the first 10 years, should finally put an end to this con game.

A Scam Exposed

CBO estimates that the legislation will increase direct spending budget authority by $1.7 trillion over 10 years. But that only tells part of the story. To contain costs on paper, Democrats employed a series of budget gimmicks. They allowed several of the bill’s most costly provisions − like the expanded Child Tax Credit, universal preschool, and universal child care − to “expire” after a few years, when they have no real intention of ending these massive expansions of federal dependence. Independent estimates of the legislation show a much higher, real cost. The Penn Wharton Budget Model estimates the bill would spend $4.6 trillion over 10 years if all the “temporary” provisions were made permanent. The Committee for a Responsible Federal Budget finds that the 10-year price tag would hit $4.9 trillion.

True Spending Without Games

Economists – including some who agree with Democrats’ radical policy objectives − have raised alarms that all this front-loaded, gimmick-obscured spending will further enflame President Biden’s inflation crisis.

As a first step in their “transformational” agenda for the nation’s economy, Democrats pumped out $1.9 trillion in March. The consequences − widely predicted but roundly ignored − have alarmed Americans. The economy has 10.4 million open jobs. In October, inflation hit a 30-year high, driving consumer confidence in November to a 10-year low. If that’s what happened when Democrats dumped $1.9 trillion into the economy a few months ago, what will happen now if they drop another $4.9 trillion?

Democrats Transform the Economy?

Most Americans are not economists, but they know when the economy is not working for them. Since Democrats began enacting their reckless plans, everything from heating their homes, to buying their groceries, to celebrating the holidays costs more. American families are already struggling with the consequences of Democrats’ “transformational” agenda, they can’t afford more.